The latest minimum wage rise will force some small businesses, especially in the retail sector where minimum staff levels are high, to close, owner
Michael Newton-Brown
says.

The proprietor of Leisures Shoe Boutiques in Sydney’s north said small retailers lacked “fat" they could cut to make up for the increase in pay.

“If there’s an increase somewhere there has to be a cut somewhere," Mr Newton-Brown said.

But Mr Newton-Brown, who employs about 20 staff in his four stores, said he was a “big believer" in paying staff “properly" and he had “no problem with increasing their wages". “I’m happy with increases up to CPI (the consumer price index, 2.5 per cent as of the March quarter)," Mr Newton-Brown said. “But this is up to 2.6 per cent and for many small businesses this will add up."

Mr Newton-Brown said many businesses would be forced to cut staff and consumers would be forced to deal with less customer service. The rise in the minimum wage would “tip" some small businesses over the edge.

In the shoe sector it was difficult and he could not cut staff. “In shoe boutiques, customers cannot serve themselves," Mr Newton-Brown said.

“And consumers these days have an enormous amount of power with technology allowing them took around and find out where they can buy the cheapest," he said.

“I can’t raise prices (to make up for the extra I will have to pay), the very opposite given the pressure to discount is now continual."

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The current rate of pay for a permanent full-time employee over 21 years of age is $17.53 an hour, and a permanent store manager with one assistant manager receives $18.97 an hour. The new legal minimum wage will be $16.37 .

Mr Newton-Brown has run his retail shops for the past 15 years. He said he always tried to pay staff above the minimum but this rise would make it hard.

“At one point we were paying $1 extra an hour," Mr Newton-Brown said.

“Most of my staff are casual, as are the vast majority of retail workers. But when you increase the minimum wage, WorkCover premiums are going up and superannuation will cost more. I can’t stay ahead of the award rate as much as I’d like to."